May 26, 2006 2:00 PM PDT

Apple thwarted in bid to unmask leaker

Apple Computer suffered a setback in its effort to plug an internal leak, after a state appeals court ruled that the computer maker can't immediately get its hands on records of who may have contacted an Apple enthusiast site with details on an unreleased product.

A lower court had ruled Apple should have access to the records of AppleInsider as it tried to unmask who had revealed information about an unreleased product. On Friday, though, the California appeals court ruled (click here for PDF) that the communications between the product leaker and the enthusiast Web site are protected by federal and state law.

The three-judge appeals court had appeared to take a dim view of Apple's case in a hearing last month.

The court's ruling is a boon to those who argued that journalists, including bloggers, should be entitled to protect confidential sources, and a setback for those who said that intellectual-property rights, in this case trade secret law, should take precedence.

Court shields Web sites
A California appeals court ruled Friday that independent Web publishers should be treated as journalists under the state constitution. Here's the relevant section:

"A publisher, editor, reporter or other person connected with or employed upon a newspaper, magazine, or other periodical publication...shall not be adjudged in contempt by a judicial, legislative or administrative body, or any other body having the power to issue subpoenas, for refusing to disclose the source of any information procured...for publication...or for refusing to disclose any unpublished information obtained or prepared in gathering, receiving or processing of information for communication to the public."

Source: California Constitution

"Today's decision is a victory for the rights of journalists, whether online or offline, and for the public at large," Kurt Opsahl, a staff attorney for the Electronic Frontier Foundation, said in a statement. Opsahl argued on behalf of AppleInsider at last month's hearing. "The court has upheld the strong protections for the free flow of information to the press, and from the press to the public."

Peter Scheer, executive director of the California First Amendment Coalition, agreed. "It's a very important case in a couple of respects. One key respect is it addresses the whole problem of protecting confidential sources when the reporter is not a traditional mainstream newspaper reporter," he said. The court's ruling that sites like AppleInsider are protected by the California Shield Law is heartening for the growing legions of bloggers reporting on companies and governments, he said.

But there was probably another motive behind Apple's request for AppleInsider's communications, Scheer said. Apple "probably initiated the litigation to scare employees, to deter further leaking. As of today, that strategy has backfired badly."

Apple representatives were not immediately available for comment.

"I'm extremely gratified by the court's decision, as it recognizes the importance of allowing online journalists to protect the confidentiality of their sources," said Kasper Jade, the pseudonymous publisher and editor-in-chief of AppleInsider. "It's a great victory for journalists of all stripes."

Shield law protections
The appeals court pointedly took issue with Apple's argument that the Web sites were not legitimate journalistic enterprises. Apple had claimed that the sites were engaged not in "legitimate journalism or news" but instead in "trade secret misappropriation" and copyright violations.

Related column
Perspective: Who's a journalist?
Now we know, thanks to Apple

Judge Conrad Rushing of the California Court of Appeal, Sixth Appellate District, who wrote the opinion, said: "We decline the implicit invitation to embroil ourselves in questions of what constitutes 'legitimate journalism.'" To do otherwise, Rushing warned, would imperil the very values the First Amendment was intended to protect.

Rushing and his two colleagues went even further, saying that the California reporter's shield law protects Web publishers--which appears to be the first decision that makes such status official. "Beyond casting aspersions on the legitimacy of petitioners' enterprise, Apple offers no cogent reason to conclude that they fall outside the shield law's protection," Rushing wrote.

California's shield law, like many such laws in other states, was written long before the Internet became popular. It protects anyone currently or previously employed by "a newspaper, magazine or other periodical publication, or by a press association or wire service." (The term "other periodical publication" was added in 1974.)

The court said the intent of the legislature was to be generous with that definition--and concluded that "petitioners' Web sites are highly analogous to printed publications" and should enjoy the same legal protections against divulging their sources.

The three-judge panel overturned Santa Clara County Superior Court Judge James P. Kleinberg's ruling from March 2005 and ordered him to grant the Web sites a protective order. The judges said that the Web sites' status as journalistic enterprises, coupled with Apple's half-hearted efforts to investigate the leak internally and exhaust other sources of information, justified granting the order.

Apple is not suing AppleInsider directly in the lawsuit, which dates to 2004, but had sought subpoenas to obtain e-mail records of AppleInsider and another site, PowerPage.org. In a separate case, Apple directly sued another enthusiast site, Think Secret, alleging that it directly infringed on Apple's trade secrets by soliciting inside information.

In a telephone interview, Opsahl said Friday's ruling could help Think Secret in its bid to get Apple's lawsuit thrown out. "Perhaps this opinion will be useful to the court's decision in that (case)."

CNET News.com's Tom Krazit contributed to this report.

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20 comments

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Good for them
Personally, Im glad they are upholding our rights for a change. Apple needs to calm the hell down..Did it really effect business? Nope? Then who really cares. Besides Jobs
Posted by sysjunky (16 comments )
Reply Link Flag
I disagree.
I think any person who gives away trade information about their
firm should be found and fired. This person probably holds a
high position at Apple which is probably why Jobs is so eager to
find this person then fire her/him.

True, it didn't really hurt Apple, because those products were
never released but the simple fact that the public knows about it
is hurting them, it gives away a piece of the puzzle that could
possibly be detrimental to them in the future, of course for that
we'll never know but it always remains a possiblity. Not to
mention Apple's competitors swarming around them like
vultures.

Jobs like the leader he is wants to run a completely tight ship
and I don't blame him. Given his history with other companies.
Microsoft is a prime example, on why you should never trust
anyone. Microsoft practically stole the Mac OS in the early
eighties when they were working on software for the Macintosh.
I'm not here to start a Mac vs. PC debate, but its safe to say
Microsoft had no clue about the Graphic User Interface until
Apple showed them and look where they are now.. Bill Gates is
the richest man in the world and he was rich to begin with! Safe
to say their successful based on that..

My guess? Jobs is thinking that should have been Apple.

He's probably repeating that major betrayal over and over in his
mind and learning from lessons past.

Don't get me wrong, I don't want the guy to lose his Job but I
would do the same thing if I was Jobs.

You just can't have rats on your ship. They'll prove costly.
Posted by ServedUp (413 comments )
Link Flag
I disagree.
I think any person who gives away trade information about their
firm should be found and fired. This person probably holds a
high position at Apple which is probably why Jobs is so eager to
find this person then fire her/him.

True, it didn't really hurt Apple, because those products were
never released but the simple fact that the public knows about it
is hurting them, it gives away a piece of the puzzle that could
possibly be detrimental to them in the future, of course for that
we'll never know but it always remains a possiblity. Not to
mention Apple's competitors swarming around them like
vultures.

Jobs like the leader he is wants to run a completely tight ship
and I don't blame him. Given his history with other companies.
Microsoft is a prime example, on why you should never trust
anyone. Microsoft practically stole the Mac OS in the early
eighties when they were working on software for the Macintosh.
I'm not here to start a Mac vs. PC debate, but its safe to say
Microsoft had no clue about the Graphic User Interface until
Apple showed them and look where they are now.. Bill Gates is
the richest man in the world and he was rich to begin with! Safe
to say their successful based on that..

My guess? Jobs is thinking that should have been Apple.

He's probably repeating that major betrayal over and over in his
mind and learning from lessons past.

Don't get me wrong, I don't want the guy to lose his Job but I
would do the same thing if I was Jobs.

You just can't have rats on your ship. They'll prove costly.
Posted by ServedUp (413 comments )
Link Flag
Shield Law
It's fortunate for the defendants that this case was tried in
California where there is a Shield Law. There ought to be a national
Shield Law so journalists in all states are protected from being
forced to divulge their sources.
Posted by CBSTV (780 comments )
Reply Link Flag
Apple's legal team regrouping
This story is not over. Non disclosure agreements mean what they say.
Posted by BentonBear (18 comments )
Reply Link Flag
Leave it to the California Justice System
So, now anybody can steal their employer's trade secrets, breaking their legally binding employment contract in the process, and pass it on to anyone with a web site and not be held accountable. WRONG DECISION, NUTCAKES.
Posted by littlejon2 (17 comments )
Reply Link Flag
Overly simplistic analysis
The shield law is not an unbreakable barrier, that lets people violate trade secret law with impunity. The complainant (Apple) must show sufficient cause in order for a court to a grant subpoena for an anonymous source's identity to disclosed. They must also exhaust all reasonable methods of internal investigation to try and discover the leak before filing suit in order to show a court is order is the only alternative. Unsealed documents from Apple show they made no attempt to investigate this matter internally before filing suit and couldn't demonstrate sufficient cause for the court to grant their request. Had Apple investigated internally they probably could have cleared the hurdle set by the shield law. The reason the shield was passed in the first place was because people where abusing the system and trying to compel journalist to identify anonymous sources even when their wasn't any reason to form them to do so, other than they didn't like what was said.
Posted by unknown unknown (1951 comments )
Link Flag
Bad ruling will be reversed
It is is incredibly presumptuous of this court to interpret the
shield law to say things it does not. If state legislators want to
pass a law protecting bloggers, they are free to do so. But, that
is not what has happened. The California Constitution projects
journalists, not any Tom, Dick or Harry who can type and throw
his output up on the Internet.

A ruling like this harms actual journalists by cheapening the
profession. If anyone who signs on to an Internet site and posts
material is a 'journalist,' then the research and writing skills that
define real journalism are rendered meaningless.

EFF has become a flack for any idiot on the Internet in a pathetic
effort to get attention for itself. I no longer support it.

Predictably, one of our least capable commenters, someone who
usually makes crude remarks about his anatomy or worse, is the
person most eagerly championing this legal decision. I think
that gets to the core of the problem Apple is having with this
case. It needs to explain why it is wrong for Internet site owners
and leakers to conspire to publish its trade secrets in terms that
even unsophisticated people can understand.
Posted by J.G. (837 comments )
Reply Link Flag
RE
"Bad ruling will be reversed"

Don't be so sure.

"It is is incredibly presumptuous of this court to interpret the shield law to say things it does not."

Courts have made rulings in the past that expand or curtail the scope of a given law. Take the Grokster case, the court took liability theory from patent law and applied to copyright law. A wide interpretation of perodical publication isn't so far fetch, at least in my view.

"The California Constitution projects journalists, not any Tom, Dick or Harry who can type and throw his output up on the Internet."

The court's interpretation would appear to disagrees with you. Apparently there is some lattitude in what's covered by a periodical publication.


"A ruling like this harms actual journalists by cheapening the profession. If anyone who signs on to an Internet site and posts material is a 'journalist,' then the research and writing skills that define real journalism are rendered meaningless."


The following taken from <a class="jive-link-external" href="http://writ.news.findlaw.com/hilden/20050426.html" target="_newWindow">http://writ.news.findlaw.com/hilden/20050426.html</a>

"For one thing, elite credentials - like experience -- don't always correlate with high-quality journalism. It bears remembering that in the recent fight between bloggers and CBS News anchor Dan Rather, bloggers prevailed. It also bears remembering that it was bloggers - not a rival network - who took Rather on in the first place.

Moreover, as competitive as elite journalists are with each other, they are often collegial too - to the point of being incestuous. They may attend each other's dinner parties and weddings; they all move between the same small, elite group of publications, and may have attended the same elite journalism schools.

Accordingly, outside journalists - including bloggers -- may be willing to take aim more quickly, speak more harshly, and investigate more thoroughly than insider journalists, especially (but not only) when the story is a story about the media.

The Drudge Report is an ongoing reminder of the value an outsider's independence and candor can bring. And what is The Drudge Report, really, but a big blog full of carefully-chosen links? Remember the Drudge Report's origin: Matt Drudge reported on the Lewinsky scandal while few - if any - in the elite media were willing to believe what they were hearing was true, or even if they did believe it, to print it."



"I think that gets to the core of the problem Apple is having with this case. It needs to explain why it is wrong for Internet site owners and leakers to conspire to publish its trade secrets in terms that even unsophisticated people can understand."

Apple didn't due such a great job investigating this case internally. The First Amendment and the California Constitution require that Apple exhaust all other alternatives before trying to subpoena journalists. The EFF's win in a motion to unseal secret documents from Apple shows that Apple tried to subpeona before conducting an investigation. A California Superior Court ruled in 2005 that the subpoenas could be issued, both to the journalists' email providers as well as to the publishers of the websites themselves. After the journalists appealed, the California Court of Appeal ordered Apple to show cause as to why the journalist's petition should not be granted.
Posted by unknown unknown (1951 comments )
Link Flag
Apple is Wrong
I've been a Mac user for over 20-years and a big promoter of the
company and its technology, but in this case, Apple is wrong. It
shouldn't be up to Apple or government or anyone to decide who
the press is or is not. Frankly, much of cable news should be called
Cable Opinion anyway, so I don't see much difference between
bloggers and most news outlets any longer.

Hooray for the First Amendment!!!!
Posted by smcarter (19 comments )
Reply Link Flag
6 Month's vs 2 weeks
If these disclosures of upcoming products are 6 months out then
Apple has a problem which doesn't mean bashing in the heads
of the 1st amendment or the Shield laws. Perhaps a more careful
accounting of who knew what when would work but I've never
done that myself.

If it is two weeks out then it is free advertising for Apple. The
only thing lost is the shock and awe Steve Jobs would see on the
faces of people when he officially announces the products.
Posted by kirkules (103 comments )
Link Flag
Switch to Microsoft
A person who wants Apple trade secrets leaked, which will destroy
the company, is not a supporter. I am sure there is Dell with
"SMCarter" on it waiting for your attention.
Posted by J.G. (837 comments )
Link Flag
Apple's Attempts to Assault Free Speech Thwarted
Steve Jobs can suck it and stop trying to terrorize websites and blogs that were giving his company free publicity anyway.
Posted by gubbord (171 comments )
Reply Link Flag
Your ignorance is showing
Your opinion is driven by your contempt for Steve Jobs. But, there
are several important principles at stake here. Suffice it to say that
you obviously have no grasp of what the cases are really about.
Posted by J.G. (837 comments )
Link Flag
 

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